scholarly journals Allies or Commitment Devices? A Model of Appointments to the Federal Reserve

2021 ◽  
Author(s):  
Keith Schnakenberg ◽  
Ian R Turner ◽  
Alicia Uribe-McGuire
Keyword(s):  
Federal Reserve ◽  
Typical Case ◽  
Economic Uncertainty ◽  
Credible Commitment ◽  
Legislative Bargaining ◽  
The Face ◽  
Ideal Points ◽  
Commitment Devices ◽  
Commitment Problems ◽  
Central Bankers

We present a model of executive-legislative bargaining over appointments to independent cen-tral banks in the face of an uncertain economy with strategic economic actors. The model highlights the contrast between two idealized views of Federal Reserve appointments. In one view, politicians prefer to appoint conservatively biased central bankers to overcome credible commitment problems that arise in monetary policy. In the other, politicians prefer to appoint allies, and appointments are well described by the spatial model used to describe appointments to other agencies. Both ideals are limiting cases of our model, which depend on the level of economic uncertainty. When economic uncertainty is extremely low, politicians prefer very conservative appointments. When economic uncertainty increases, politicians’ prefer central bank appointees closer to their own ideal points. In the typical case, the results are somewhere in between: equilibrium appointments move in the direction of politician’s preferences but with a moderate conservative bias.

Commitment or Equivocation

2020 ◽  
pp. 112-115
Author(s):  
Alasdair Roberts
Keyword(s):  
Institutional Arrangements ◽  
National Defense ◽  
Credible Commitment ◽  
Scholarly Writing ◽  
The Future ◽  
Governance Strategies ◽  
Commitment Devices ◽  
Commitment Problems ◽  
Credibility Problem

This chapter distinguishes between commitment and equivocation in the design of governance strategies. For the last thirty years, “credible commitment” has been a stock phrase in scholarly writing about government. Governments are said to have a credibility problem, because citizens and businesses do not trust them to keep promises about how they will behave in the future. The task for leaders is to find techniques for demonstrating that they will keep their word, by designing institutions that make it hard to break promises. These institutional arrangements are called commitment devices. It can then be concluded that leaders are mainly concerned with finding clever ways to solve commitment problems. Commitment, it seems, is the key to prosperity, order, and legitimacy. Leaders want people and businesses to make choices that stimulate growth and deepen their own attachment to the existing order. However, the situation confronting leaders is actually more difficult than this. Sometimes equivocation rather than commitment is the sound choice. Leaders know that there will inevitably be emergencies where everyday rules have to be put aside, and they do not want to make it impossible to do this. For example, property might need to be seized in the name of national defense.

scholarly journals Territorial wars and absolute outcomes

2021 ◽  
Vol 8 (3) ◽  
pp. 205316802110433
Author(s):  
Brian Benjamin Crisher
Keyword(s):  
Regime Change ◽  
Territorial Disputes ◽  
Credible Commitment ◽  
Territorial Conflict ◽  
Commitment Problem ◽  
The Face ◽  
State Death ◽  
Commitment Problems

Why do some wars end with an absolute outcome, with state death or regime change? I argue that we are more likely to see absolute outcomes when we have territorial disputes with the potential for credible commitment problems and asymmetric disputants. In the absence of credible commitment problems, disputes are less likely to recur, and states are unlikely to seek to absorb the opponent state or remove its government. Among more symmetric disputants, states cannot impose an absolute outcome, and we are more likely to see recurrent disputes in the face of credible commitment problems. Only in very asymmetric dyads are we likely to have both the required willingness and opportunity to impose absolute outcomes to attempt to solve a credible commitment problem over territorial conflict.

scholarly journals Rethinking MAC Clauses in the Time of Akorn, Boston Scientific, and COVID-19

2021 ◽  
pp. 241
Author(s):  
Samuel Shapiro
Keyword(s):  
Contract Law ◽  
Boston Scientific ◽  
Economic Uncertainty ◽  
The World ◽  
The Face

The MAC clause is perhaps the most important clause in contract law, giving acquirers the ability to terminate even the largest agreements in the face of an often vaguely defined “Material Adverse Change.” For decades, even though MAC clauses have been present in nearly every merger agreement, courts have almost universally refused to enforce them. But the Delaware Chancery Court’s 2018 decision in Akorn may finally change that. As the world deals with the economic uncertainty caused by COVID-19, courts may soon get more opportunities to decide whether or not they will follow Akorn’s lead and begin to allow companies to exit agreements. In this Article, I argue that they should.

The Special Relationship and the Falklands War

2015 ◽  
pp. 40-92
Author(s):  
Sally-Ann Treharne
Keyword(s):  
Prime Minister ◽  
Self Determination ◽  
Falkland Islands ◽  
Great Success ◽  
Special Relationship ◽  
Economic Uncertainty ◽  
National Pride ◽  
Falklands War ◽  
The Face ◽  
The Uk

The Falklands War between Britain and Argentina from April to June 1982 was an emotive political and ideological issue for the UK and its Prime Minister, who fought tirelessly to safeguard the Falkland islanders’ right to self-determination. The war represented a considerable financial and moral commitment by the British to the Falkland Islands and their 1,800 inhabitants in a time of significant economic uncertainty in the UK. Notwithstanding this, Britain’s hegemony and influence over the islands was reasserted in the face of perceived Argentine aggression. Britain’s victory was considered a great success in the UK given the strategic difficulties involved in orchestrating a war in a wind-swept archipelago nearly 8,000 miles from the British mainland, but a mere 400 miles from Argentina. Moreover, it helped to secure Thatcher’s re-election the following year and was a source of national pride for the jubilant British public.1

Accessing the state: Executive constraints and credible commitment in dictatorship

2019 ◽  
Vol 31 (4) ◽  
pp. 568-599 ◽  
Author(s):  
Anne Meng
Keyword(s):  
Case Studies ◽  
State Power ◽  
The State ◽  
Theoretic Model ◽  
Credible Commitment ◽  
The Future ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Distribution Of Power ◽  
Commitment Problems

When do executive constraints provide credible commitment power in dictatorships, and under what conditions do leaders establish such constraints? This article argues that institutions successfully constrain autocrats only when elites are given real access to state power, such as appointments to key governmental positions. I present a game theoretic model in which an autocratic leader decides whether to establish binding constraints at the start of her rule. Doing so shifts the future distribution of power in favor of elites, alleviating commitment problems in bargaining. I show that leaders are likely to place constraints on their own authority when they enter power especially weak, and these initial decisions shape the rest of their rule. Even if a leader enters power in a uniquely weak position vis-á-vis other elites, and is on average, quite strong, the need to alleviate commitment problems in the first period swamps expectations about the future distribution of power. I illustrate the model’s findings through case studies of Cameroon and Côte d’Ivoire.

Prospects for China to end-2018

2018 ◽  
Keyword(s):  
Economic Uncertainty ◽  
Content Type ◽  
The Face ◽  
Investment Barriers ◽  
Trump Administration ◽  
At Home

Subject Prospects for China in the second half of 2018. Significance On the face of it, China is in a less settled and more fragile position than it was when 2018 began. Efforts to assuage the Trump administration on trade have failed; long-threatened US tariffs and investment barriers look set to take effect. The resulting economic uncertainty raises doubts about vital deleveraging efforts at home.

scholarly journals Crisis and Responses: The Federal Reserve in the Early Stages of the Financial Crisis

2009 ◽  
Vol 23 (1) ◽  
pp. 51-75 ◽  
Author(s):  
Stephen G Cecchetti
Keyword(s):  
Financial Crisis ◽  
Federal Reserve ◽  
Balance Sheet ◽  
Early Stages ◽  
Lending Rate ◽  
Interbank Lending ◽  
Central Bankers

Realizing that their traditional instruments were inadequate for responding to the crisis that began on August 9, 2007, Federal Reserve officials improvised. Beginning in mid-December 2007, they implemented a series of changes directed at ensuring that liquidity would be distributed to those institutions that needed it most. Conceptually, this meant America's central bankers shifted from focusing solely on the size of their balance sheet, which they use to keep the overnight interbank lending rate close to their chosen target, to manipulating the composition of their assets as well. In this paper, I examine the Federal Reserve's conventional and unconventional responses to the financial crisis of 2007–2008.

Group Pleasures

2017 ◽  
Vol 35 (1) ◽  
pp. 64-86 ◽  
Author(s):  
Gary Alan Fine ◽  
Ugo Corte
Keyword(s):  
Small Groups ◽  
Additional Research ◽  
Field Observations ◽  
Group Stability ◽  
The Face ◽  
Temporal And Spatial ◽  
Commitment Devices

As a consequence of their size and fragility, small groups depend on cohesion. Central to group continuation are occasions of collective hedonic satisfaction that encourage attachment. These times are popularly labeled fun. While groupness can be the cause of fun, we emphasize the effects of fun, as understood by participants. Shared enjoyment, located in temporal and spatial affordances, creates conditions for communal identification. Such moments serve as commitment devices, building affiliation, modeling positive relations, and moderating interpersonal tension. Further, they encourage retrospective narration, providing an appealing past, an assumed future, and a sense of groupness. The rhetoric of fun supports interactional smoothness in the face of potential ruptures. Building on the authors’ field observations and other ethnographies, we argue that both the experience and recall of fun bolster group stability. We conclude by suggesting that additional research must address the role of power and boundary building in the fun moment.

scholarly journals Central Banking and Inequalities: Old Tropes and New Practices

2021 ◽  
Author(s):  
Clément Fontan ◽  
Peter Dietsch ◽  
François Claveau ◽  
Jérémie Dion
Keyword(s):  
Federal Reserve ◽  
Critical Analysis ◽  
Policy Instruments ◽  
Central Banks ◽  
Central Banking ◽  
Computer Assisted ◽  
Bank Of Canada ◽  
The One ◽  
Central Bankers ◽  
Do So

This paper presents a critical analysis of the stance taken on inequality by two central banks since 2015: the Bank of Canada (BoC) and the Federal Reserve (Fed). The analysis is informed by a computer-assisted discourse analysis of how central bankers from the two institutions position themselves when it comes to issues of inequality. We observe that the position on inequality of the two central banks has changed in recent years and continues to do so. We argue that the stance on inequality taken by the BoC and the Fed suffers from a number of both inconsistencies and shortcomings. On the one hand, the BoC and the Fed claim that monetary policy instruments are too blunt to target specific sectors of the economy. On the other hand, with their response to COVID-19, they have demonstrated that such targeting is possible after all.

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